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Even with a quarter full of strong content, Paramount+ hasn’t yet summited.
The streaming service added 4.6 million subscribers in the third quarter to reach 46 million, despite the removal of 1.9 million customers after SkyShowtime launched in the Nordics.
The 4.6 million adds for the flagship streaming service are slightly lower than the 4.9 million additions it reported last quarter. However, that still represents a significant amount of growth, especially when compared to competitors. For instance, Netflix, the world’s largest streaming service, added about half of that subscriber total this quarter.
Parent company Paramount credited subscriber growth to launches in international markets, as well as a strong content slate with the debut of the NFL season and the UEFA Champions League.
During a Wednesday morning call with investors, CEO Bob Bakish specifically pointed to original series, including Seal Team, and films Orphan First Kill and Beavis & Butt-Head Do the Universe as catalysts for growth.
“This powerful and popular content is the fuel that continues to drive growth in subscriptions across our streaming platforms in the third quarter,” Bakish said.
Parent company Paramount climbed to nearly 67 million global direct-to-consumer subscribers. The company’s other DTC platforms include Showtime, Noggin, BET+ and more.
AVOD service Pluto TV also saw gains, becoming the first free ad-supported streaming TV service to represent a significant enough portion of TV viewing to be named in Nielsen’s monthly TV viewing Gauge report.
Pluto added 2.4 million global monthly active users (MAU) to reach 72 million, and CFO Naveen Chopra said total viewing hours grew “strong double digits” year-over-year. That follows similar trends to competitors such as Tubi, which reported a record quarter on Tuesday.
Bakish also pointed to the strength of Paramount Pictures’ slate this year, which has six No. 1 films, including Top Gun: Maverick.
The thriller Smile, released at the end of September, is now on track to gross over $200 million globally. The film is heading to Paramount+ as part of the company’s 45-day theatrical-to-streaming strategy. The Top Gun sequel will also head to the streaming service before the end of the year, and the company believes those two films will further drive subscriber growth in the fourth quarter.
Also, next quarter, look out for two new Taylor Sheridan series coming to Paramount+, as well as the revival of Criminal Minds.
“We expect all these new titles and highly anticipated events will entice more and more subscribers to Paramount+ in the coming months,” Bakish said.
Another growth driver included Paramount’s partnership with Walmart, which offers the streaming service to subscribers of Walmart’s membership program, Walmart+. Bakish said the company is already exceeding its early subscriber goals from the service.
“Early results have been very encouraging,” Bakish said. “Paramount+ has great potential to accelerate Walmart+ growth and retention, and we expect the partnership to grow as the marketing program ramps up, including an in-store presence for the more than 100 million retail customers who pass through Walmart in the U.S. every week.”
Still sliding
Subscriber growth didn’t stop Paramount stocks from tanking, however.
The company pointed to macroeconomic headwinds and continued advertising revenue struggles as its major setbacks.
DTC revenue increased 38% year-over-year, and advertising revenue gained 4%, but Paramount’s TV network business saw revenue drop 5% because of lower advertising and pay-TV subscribers.
“The ad monetization piece, while in the short-term is impacted by the marketplace, the fundamental engagement metrics that we see there give us great confidence that increasing consumer engagement will ultimately drive improvements in ARPU as the market returns,” Chopra said.
A price hike might also be coming to Paramount+.
“We definitely see opportunities to increase price on Paramount+, and you will see us do that in the future,” Chopra said. “We’ll be smart about how and when we raise the price because we’ll be looking to do it in ways that minimize any sort of negative impact.”
And regarding Netflix’s upcoming ad tier?
“We’re not surprised they’re joining the market, and we’re happy to compete with them,” Bakish said.
